1 Magnificent Canadian Dividend Stock Down 59% to Buy for Decades

This one hurts to look at, which is why it deserves a second glance. When a Canadian dividend stock drops, the market often prices in a permanent problem. Sometimes the problem turns out to be temporary. If the business still sells an essential service, and if management keeps the dividend aligned with real cash flow, a lower share price can give investors a better starting yield and more upside when conditions improve. The trick is patience, not bravado, and a willingness to hold while the company fixes the story.

AQN

Algonquin Power & Utilities (TSX:AQN) runs a utility business first and a portfolio project second. Through its Liberty operations, it supplies regulated electricity, gas, and water services across parts of the United States and Canada. People still heat homes, wash dishes, and charge phones in recessions, which gives this kind of business a steady baseline. Algonquin also owns power generation assets, but it now aims to simplify the mix and put the spotlight back on regulated earnings.

It looks relevant now as it shifted from growth-at-any-cost to clean-up mode. Higher interest rates punished leveraged utilities, and investors demanded clarity. Algonquin responded with a tighter strategy, leadership changes, and a sharper focus on execution. In early January 2026, it appointed a new chief operating officer to lead regulated operations and push reliability and capital discipline. For a utility, boring operations create the best outcomes and the best investor experience.

Why the drop?

The chart tells a story of disappointment, but it hints at opportunity. AQN sits about 59% below its early-2021 peak, and that drop reflects more than mood. The dividend stock cut its dividend and worked through a period of weaker confidence. Yet the core utility footprint did not vanish. Customers pay bills, and regulators allow returns when the company delivers service and invests prudently. If you believe the reset has already happened, you can treat today’s price as a starting point for the next decade, not a judgment on the last one — especially given shares are actually up about 30% in the last year.

Recent earnings keep the debate alive. Algonquin’s latest quarterly update showed year-over-year improvement on its adjusted measures, driven by steadier regulated results and fewer ugly surprises. That matters as the market wants proof that the turnaround lives in operations, not in accounting. The dividend stock still needs to keep costs tight and deliver on capital projects, but the direction has looked better than the headlines suggest, and that can rebuild trust over time.

Looking ahead

The bigger catalyst sits in the portfolio reshuffle. Algonquin agreed to sell most of its renewable energy business, while keeping hydropower, to simplify the story and pay down debt. Investors often reward utilities that stick to regulated growth and avoid complex side quests. If the sale closes cleanly and the balance sheet strengthens, the market can start valuing it more like a plain utility again. That re-rating can matter as much as any single quarter.

Valuation always gets messy with utilities, as the market treats interest rates as a switch. Still, you can anchor on the cash you actually receive. Algonquin declared a fourth-quarter 2025 dividend of about $0.0918 per share, payable in mid-January 2026. At recent prices, that works out to a yield of 4.4%. It won’t thrill yield chasers, but it can suit investors who want a dividend that fits a more conservative plan and has room to endure through bumps. Even now, here’s what $7,000 could still bring in.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTAQN$8.57816$0.37$301.92Quarterly$6,993.12

Bottom line

Here is why AQN can make sense as a dividend stock even after a steep decline. It sells essential services, it reset the dividend to a more realistic level, and it has a clearer path to simplify and strengthen the balance sheet. You still need to respect the risks, including regulatory decisions, execution slip-ups, storms that raise costs, and another spike in rates. If you can hold through that noise, you may end up with a utility that pays you to wait, and the compounding can do the heavy lifting.

The post 1 Magnificent Canadian Dividend Stock Down 59% to Buy for Decades appeared first on The Motley Fool Canada.

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More reading

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• 2 of the Best TSX Stocks to Buy Before They Start to Recover
• Down 60%, This Dividend Stock is a Buy and Hold Forever

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.